MultiChoice has said that a draft contract which would see the company pay ANN7 R150 million per year for its channel was never signed.
The Third Channel Amendment Agreement between MultiChoice and Infinity Media Networks, dated 9 June 2014, emerged as part of the leaked Gupta emails.
The agreement was contained in an email from TNA Media Chief Executive Nazeem Howa to Tony Gupta.
The agreement was amended to increase the annual fee for ANN7 from R50 million per year to R150 million.
With effect from the Effective Date [1 April 2014], the fees payable by MCA [MultiChoice] in terms of clause 4.1 of the Agreement shall be increased from R50 000 000.00 (fifty million rand) per annum, to R150 000 000.00 (one hundred and fifty million rand) for the remainder of the term. For the avoidance of doubt, the increased fees for the remainder of the term shall be calculated pro rata from the effective date until the end of the term.
Another change was that MultiChoice would not have the right to cancel ANN7 should it not perform well.
Notwithstanding any other provision contained in this agreement, except for the provisions of clause 7.6, should the Performance Benchmark not be reached, MCA shall have the right to intervene and make suggestions how to reach the Performance Benchmark, but shall not have the right to cancel the agreement as a result of the Channel Supplier’s failure to reach the Performance Benchmark. Should the Channel Supplier however fail to adhere to MCA’s requests and suggestions, such failure will be a breach in terms of clause 12.1.ii
The proposed agreement drew sharp criticism online, with many commentators questioning the value of ANN7.
MultiChoice responded to questions about the agreement, stating that “the draft contract published was not signed and MultiChoice is not part of the email exchange referred to in your query”.
The company did not reveal how much it pays ANN7 for the rights to carry the news channel on DStv.
It confirmed it has a contract with the channel, but the details are subject to confidentiality clauses.